Reforming personal housing benefits : towards a merger of social security benefits?

With public expenditure totalling 18 billion euros, personal housing benefits / housing allowances account for nearly half of the budget allocated to housing policy in France. However, the effectiveness of these subsidies has been called into question by a series of empirical studies which have shown that they are largely captured by landlords in the form of higher rents. Furthermore, these subsidies severely hinder low-income households’ return to work, due to their poor coordination with other social benefits. In response to these criticisms, The Institut des politiques publiques has analysed several reform scenarios aimed at restoring the effectiveness of this social policy. The most promising option would be to merge personal housing benefits / housing allowances with other household support schemes, in particular the Active Solidarity Income (RSA) and the Employment Bonus (PPE). Such a reform would significantly simplify the structure of social benefits, whilst reducing the extent to which landlords capture the benefits and preserving the gains associated with returning to work.